Chile’s central bank (BCCh) indicated a continued willingness to punt the normalisation of monetary policy in the March IPoM. The path now assumes an extended pause with the next cut in the base scenario projected for September 2025 and convergence to 4% rates only by July 2026. While it is possible that an extended pause will start to morph into something more permanent, at least until a shift in the data necessitates a renewed initiative, we believe it is more likely that the BCCh is simply buying time to see how domestic inflation and external factors develop before resuming the final cuts of this cycle.
For more, including market takeaways, please see full note.